Hyundai Mobis, seeking to be a top holding company of Hyundai Motor Group, comes up with ambitious plan to raise sales to 44 trillion won by 2025. (Photo: Hyundai Mobis)

Hyundai Mobis, seeking to be a top holding company of Hyundai Motor Group, unveiled an ambitious plan to raise sales to 44 trillion won by 2025, a 1.8-fold jump from current 25 trillion won.
Hyundai Mobis announced the mid- and long-term plan to allay U.S. activist fund Elliot Management’s opposition against the group’s restructuring plan and some shareholders’ complaints against the ratios of Hyundai Mobis’s demerger and merger with Hyundai Globsis. It is the first time Hyundai Mobis has presented its mid- and long-term blueprint and sales target as a holding company of the group as it is split. Hyundai Motor Group’s restructuring plan calls for splitting the domestic module and after-sale parts business out of Hyundai Mobis and merging them with Hyundai Globis.
Following the demerger, Hyundai Mobis will focus on such future car businesses as self-driving and connected cars, while diversifying business portfolios by expanding the portion of supplies to global automakers. Hyundai Mobis will be also in charge of infusing innovative technologies through M&As and establishing future strategies of the whole of the group.
Hyundai Mobis aims to raise sales from 25 trillion won this year to 36 trillion won by 2022 and 44 trillion won by 2025 with an annual average growth rate of 8 percent.
In particular, Hyundai Mobis targets boosting sales in self-driving and connected cars to 11 trillion won this year. A report by the global consulting company PWC showed that the self-driving and connected car market is forecast to surge from 92 million units in 2017 to 540 million units in 2025 on an accumulated basis.
The market for self-driving car censors is predicted to jump with an annual average growth rate of 23 percent by 2021. The company plans to secure and mass-produce such censor technologies as LIDAR and camera, and RADAR by 2022, on a step-by-step basis. To this end, the company aims to pour up to 10 percent of sales in the automotive parts business into R&D investments.
Hyundai Mobis is working on the development of future displays, including head-up display (HUD) using augmented reality while the company also plans to supply products combining the existing braking, lighting, safety and control hardware as well as censor technologies to global automakers.
Senior Executive Vice President Yang Seung-wook of Hyundai Mobis, head of ICT Research Institute, said, “Hyundai Mobis will transform itself into a company specializing in future and new technologies, departing from the conventional automotive parts maker like Bosch of Germany, which disposed of internal combustion engine parts business and Delphi of the United States, which spun the business of active safety systems, including self-driving technology.”
Hyundai Mobis is seeking to diversify its business portfolios by enhancing the portion of products it supplies to a global automaker other than Hyundai Motor group subsidiaries. The company now earns 70 percent of its total sales from the subsidiaries.
The group has a vertical integration regime in which the more parent companies earn, the more stable their subsidiaries are getting while the while of the group is staggering at worst scenarios. In reality, as Hyundai Motor and Kia Motors suffered setbacks in performances in China and the United States, Hyundai Mobis also saw the operating profit for the first quarter of the year plunge by 32.7 percent over the same period of last year.
Hyundai Mobis is seeking to break this structure by securing its own proprietary technologies. The company plans to increase revenues from supplies to global automakers to $10 billion by 2022, a 1.7-fold surge from $6 billion in 2017. Hyundai Mobis aims to raise the portion to more than 40 percent after 2022.